If you own or manage a short-term rental property in Melbourne or anywhere in Victoria, the Victorian Government’s 7.5% Short-Stay Levy has applied to your bookings since 1 January 2025. Airbnb and Booking.com both add it to the guest’s booking and pay it to the State Revenue Office for you, so it does not come out of your payout. Direct bookings are different.
Before getting into how it works, it’s worth reading our earlier piece on whether Airbnb is still profitable in Australia. The levy is one of several factors now changing the numbers.
This guide covers the full picture.
What Is the Short-Stay Levy?
The Short-Stay Levy is a 7.5% tax on all short-term accommodation bookings in Victoria for stays of fewer than 28 consecutive days. It was introduced under the Short Stay Levy Act 2024 and took effect on 1 January 2025.
Revenue goes directly to Homes Victoria to fund social and affordable housing, with 25% earmarked for regional Victoria. The levy is projected to raise approximately $60 to $75 million per year.
It applies to any residential property rented out for short stays: entire homes, apartments, individual rooms, granny flats, tiny homes, and stationary caravans. If you list on Airbnb, Booking.com, Stayz, or accept direct bookings, this levy almost certainly applies to you.
The Victorian State Revenue Office (SRO) is the authoritative source for the levy. Their FAQ page covers most edge cases in detail.
What Does the 7.5% Apply To?
The levy is calculated on the total booking fee, which includes:
- The nightly accommodation rate
- Cleaning fees
- Any service charges or booking fees
- GST (where applicable)
Credit card surcharge fees are excluded.
If a guest’s total booking comes to $1,000 (including cleaning and GST), the levy is $75.
The levy applies to 7.5% of the total amount inclusive of the levy itself. For direct bookings where you’re calculating from a pre-levy base, apply approximately 8.11% to your pre-levy total to arrive at the correct 7.5% of the gross amount.
Who Has to Pay It?
Properties subject to the levy
The levy applies to any Victorian residential property used for short stays (under 28 days) that is not the owner’s or tenant’s principal place of residence, including:
- Entire investment homes and apartments
- Private rooms within a property that is not your main home
- Granny flats and secondary dwellings, even if located on the same land as your principal residence
- Tiny homes and stationary caravans
Exempt properties
- Your principal place of residence (PPR). If the property you’re renting out is genuinely your main home, no levy applies. This is assessed objectively based on actual occupation.
- Hotels, motels, hostels, and caravan parks. Commercial residential premises are excluded.
- Rooming houses, retirement villages, and residential care facilities.
- Student accommodation connected to an educational institution.
- Staff and employee accommodation at schools, farms, and healthcare facilities.
- Temporary crisis accommodation provided on a not-for-profit basis by government-funded homelessness agencies.
- Bookings made before 1 January 2025. Only bookings made on or after 1 January 2025 attract the levy, regardless of when the stay occurs.
- Stays of 28 consecutive days or more. These fall outside the definition of a short stay.
For the full definitions of excluded property types, see the SRO’s understanding the short stay levy page.
Granny flat note: A granny flat on the same property as your principal residence is still subject to the levy if it can be occupied as a standalone dwelling. The PPR exemption covers the main residence only.
Who Collects and Remits the Levy?
Platform bookings (Airbnb, Booking.com, Stayz, etc.)
The platform is legally responsible for collecting the levy from the total booking amount and remitting it to the SRO. Hosts and property managers are not required to register with the SRO or lodge returns for platform bookings.
Direct bookings (your own website, phone, or email)
For bookings taken without a third-party platform, you are personally responsible for:
- Registering with the SRO before the end of your first levy period
- Collecting the levy from guests
- Lodging returns and paying; annually if total booking fees are under $75,000 per year, or quarterly if they are $75,000 or more
Returns are due within 30 days of the end of each quarter (1 Jan, 1 Apr, 1 Jul, 1 Oct). Register and lodge via the SRO’s online portal.
How Each Platform Handles It
Airbnb and Booking.com handle the levy the same way for hosts: the guest pays it on top of the booking and the platform pays it to the SRO. Only direct bookings need you to collect and lodge it yourself.
Airbnb: levy charged to the guest
On Airbnb, the 7.5% levy is added on top of your listed price and charged directly to the guest at the time of booking. Airbnb calculates, collects, and remits it to the SRO automatically.
For hosts, this means:
- No changes are required to your Airbnb listing or pricing.
- Your host payout is unaffected; the guest absorbs the cost.
- If your property is exempt (for example, it is your principal place of residence), submit a declaration to Airbnb via their Victoria short stay levy help article so they do not apply the levy to your bookings.
Example: A guest books a Melbourne apartment for 3 nights at $200/night with a $60 cleaning fee.
- Accommodation: $600
- Cleaning: $60
- Total base: $660
- 7.5% levy: $49.50
- Guest pays: $709.50 | Host receives: $660 (minus Airbnb’s service fee)
Booking.com: levy charged to the guest
Booking.com works the same way as Airbnb for hosts. The 7.5% levy is added on top of the booking total, charged to the guest, and paid to the SRO by Booking.com on your behalf.
It does not come out of your payout, so you do not need to raise your Booking.com rates to cover it.
Contact Booking.com partner support directly if you need help with the levy settings on your property.
Example: You list at $200/night on Booking.com.
- The guest pays $215 ($200 plus the $15 levy)
- Booking.com pays the $15 levy to the SRO
- Booking.com deducts its 15% commission: $30
- You receive $170, the same as before the levy
Neither your Airbnb nor your Booking.com pricing needs adjusting for the levy. Direct bookings are where you add it yourself.
Owners Corporations (Strata Buildings)
From 1 January 2025, an owners corporation can pass a special resolution (75% of lot owners or lot entitlements) to ban short-term rentals within the building. This ban cannot apply to a lot that is the owner’s principal place of residence.
If you manage properties in strata buildings, confirm whether any such resolution has been passed or is under consideration. Consumer Affairs Victoria has further guidance on owners corporation rules and dispute processes.
Night Caps
Victoria has no statewide night cap on short-term rentals as of 2025. Individual local councils can introduce their own limits. Some councils, including parts of inner Melbourne and the Mornington Peninsula, have moved to restrict unhosted properties to as few as 90 nights per year. Check with your specific local council, as restrictions vary significantly by area. For how the rules compare in other states, see our guide to short-term rental legal requirements in Australian cities.
Platform Comparison
| Airbnb | Booking.com | Direct Bookings | |
|---|---|---|---|
| Who collects the levy | Airbnb | Booking.com | You |
| Who bears the cost | Guest (added on top) | Guest (added on top) | Guest (you must collect) |
| SRO registration required | No | No | Yes |
| Pricing action required | None | None | Add levy to your rates |
| Returns required | No | No | Yes (annual or quarterly) |
Exemption Reference
| Property type | Subject to levy |
|---|---|
| Investment property (entire home) | Yes |
| Principal place of residence | No |
| Room within principal place of residence | No |
| Granny flat at your home address | Yes |
| Hotel or motel | No |
| Booking made before 1 Jan 2025 | No |
| Stay of 28 or more consecutive days | No |
| University student accommodation | No |
What to Do Now
- Booking.com listings. No pricing change is needed. Booking.com adds the levy to the guest’s booking and pays it for you.
- Airbnb listings. If your property is your principal place of residence and qualifies for exemption, submit the declaration via Airbnb’s help article. Otherwise, no action is needed.
- Direct bookings. Register with the SRO and add the levy as a line item in your booking process or property management software.
- Strata buildings. Confirm whether your owners corporation has passed or is considering a resolution to ban short stays. Consumer Affairs Victoria is a useful starting point for understanding your rights and obligations.
- Local council. Check whether any night cap or local registration requirements apply to your area.
- Accountant. The levy is separate from your income tax obligations on rental income. Get advice on how to account for it correctly.
Need Help?
Managing the levy across multiple platforms, keeping pricing calibrated across platforms, and staying across changing local council rules takes time. Holiday House Manager handles all of this on behalf of our Melbourne clients, from platform pricing adjustments to compliance monitoring and direct booking levy management.
Get in touch if you’d like us to review how the levy affects your property’s returns or your current pricing structure across platforms.
General information only; not legal or financial advice. For advice specific to your circumstances, consult a qualified accountant or legal professional. For official guidance, visit the Victorian State Revenue Office.
